This is a true story about bagels. In the 1980s, there was an agricultural economist in America named Paul Feldman. He once led a research institute that analyzed weapons spending for the U.S. Navy. The institute’s revenue came from various research contracts. Whenever they won a research contract, Feldman would buy bagels to share with everyone as a sort of reward.
Gradually, Feldman developed a habit: every Friday, he’d put a basket of bagels in the office for anyone to take. Employees from other departments in the building found out and started coming by to grab a few bagels too. The basket would empty quickly. Feldman had to buy more each time — at his peak, bringing over 100 bagels a week.
Eventually, Feldman felt this wasn’t cost-effective. To recoup the cost of buying bagels, he placed an empty money basket next to the bagel basket with a suggested price label. Surprisingly, this unattended collection basket recovered 95% of the bagel money. Feldman was delighted, believing he had proven that people can exercise moral self-discipline. As for the unrecovered 5%, he assumed it was just people forgetting to pay.
Later, Feldman decided to quit his leadership position at the research institute and sell bagels full-time. He drove around office buildings in Washington, D.C., drumming up business in the simplest way: early each morning, he’d place bagels and a cash basket in the break rooms of different companies, then return at lunchtime to collect the money and leftover bagels.
His economist friends all thought he was crazy. According to the “economic man” theory, people would surely steal all the bagels and he’d lose everything. But Feldman was confident and pressed on with his approach. To his friends’ surprise, although he didn’t recover as much money as he had at the research institute, he still achieved an 87% payment rate. A few years later, Feldman was delivering 8,400 bagels to 140 companies each week, earning as much as he had as a research analyst.
While selling bagels, Feldman never forgot his economist roots. He treated his business as an economic experiment, meticulously recording every data point. He discovered that by measuring the gap between actual revenue and expected revenue for sold bagels, he could effectively examine customer honesty. Would they steal bagels? What factors determined whether some people took without paying, some paid, and why people at certain companies were more honest than others?
The data showed that people at small companies were more honest than those at large companies. A small company with only a few dozen employees typically had a payment rate 3 to 5 percentage points higher than a large company with several hundred employees. This surprised Feldman because he thought larger companies would have more people gathered around the bagel basket, meaning more witnesses who would pressure you to put money in the box. But the reality was different. In a smaller group, if you do something small and insignificant, everyone finds out immediately — which actually encourages prudence and discretion. In a large company, even if you take a bagel without paying, who would know who you are? This principle can also be applied to society at large. Rural crime rates are far lower than urban crime rates, largely because in rural areas, crime is much more likely to be known by all your neighbors. This is the effect that environment has on people’s morality.
Based on his observations, Feldman also believed that morale was a very important factor. Employees who love their work and like their boss tend to be more honest. Within a company, Feldman found that the higher the rank, the more likely people were to take without paying.
He once delivered bagels to a company spread across three floors for a long time. The top floor housed management, while the lower two floors housed sales, service, and administrative employees. The money collected from the lower floors was noticeably more than from the top floor. Feldman speculated that management personnel, with their excessive need for control, were more prone to dishonest behavior. Some cynically suggested that perhaps dishonesty was precisely what got these people into management in the first place.
The data also showed that personal mood affects honesty. Weather, for example, was a major factor. Good weather meant better payment rates. Bad weather — like wind and rain — led to widespread free-riding.
Most interestingly, holidays also affected payment behavior. Some holidays made people worse, while others made them better. Payment rates dropped 2% during Christmas week — Thanksgiving was bad too, and Valentine’s Day week wasn’t great either. Good holidays included July 4 (U.S. Independence Day), Labor Day, and Columbus Day. On the day of the 9/11 terrorist attacks, people also behaved remarkably well. What was the difference between these holidays and memorial days? Feldman discovered that holidays with less theft were those that inspired a sense of honor. Holidays with more theft were those filled with anxiety and expectations toward loved ones.
There are environmental factors that influence people’s honesty, and emotional factors as well. But what excited Feldman most wasn’t discovering why people are dishonest — it was discovering that, even with the temptation of personal gain, people can still remain honest. Yes, some people stole bagels from him, but the vast majority didn’t take them for free — even when no one was watching, even on rainy days, even at Christmas.
The ancient Greek philosopher Socrates’ student Glaucon once told a story: A simple, honest shepherd found a giant’s ring in a cave, which gave him the power of invisibility. With no one able to monitor him, this honest shepherd stole jewels, seduced the queen, and killed the king. The story raised a moral question: Can anyone resist the temptation of evil, especially when they know their actions won’t be discovered?
Feldman found the answer: people can be honest. At least when it came to bagels, he was 87% confident.
Author: Zhang Shu